VW hires compensation expert

Volkswagen AG’s new settlement master will have to steer around a squadron of lawyers to fulfill his mission of providing “prompt relief” to the owners of diesel-engine cars rigged to cheat emissions tests.German automaker Volkswagen, the target of US lawsuits over its pollution-cheating devices on diesel engines, said Thursday it has hired lawyer Kenneth Feinberg to handle the complaints. Ken Feinberg said he was hired by the automaker to help it avoid protracted litigation by setting up a quick and easy process for compensating consumers whose cars are worth less because they they illegally spew pollutants.

Feinberg, known for handling large consumer compensation cases such as the deadly ignition switches used in some General Motors cars, was hired to design and administer an independent claims resolution program to address claims related to the diesel-engine vehicles equipped with emissions standards-spoofing software. The scandal first emerged in the United States in September, where a number of class-action suits against VW have been filed. “We are pleased to announce the retention of Kenneth Feinberg. His extensive experience in handling such complex matters will help to guide us as we move forward to make things right with our customers,” said Michael Horn, president and chief executive of Volkswagen Group of America, in the statement. The claims program won’t stop the lawsuits, said plaintiffs’ attorney Steve Berman, who filed the first such suit in September. “How could it possibly protect consumers when it’s not part of a court-supervised process?” he said.

The plaintiffs who didn’t accept the earlier offers wound up receiving higher settlements through lawsuits, he said. “We showed in BP that if you stand up for your legal rights, you get substantially more than what Feinberg will offer,” said Rice, who was a lead negotiator for plaintiffs in an $11.8 billion settlement with the London-based oil company. The VW program under Feinberg’s stewardship should lead to earlier resolution of claims and may limit the litigation, said Erik Gordon, a University of Michigan law professor. “They’re certainly going to thin out the claims,” Gordon said. “ A lot of potential claimants will say, ‘Why should I go through a class action”’ and pay part of their settlements in fees to lawyers, he said. He has also handled the General Motors Co. ignition-switch settlement fund, as well as compensation for victims of the Sept. 11, 2001, terrorist attacks.

The consumer lawsuits were set off by the EPA’s Sept. 18 announcement that Volkswagen used deceptive software to make some vehicles with diesel engines appear as if they met emissions standards. The consumers are seeking returns of premiums paid for the vehicles, compensation for diminished value and possible return of purchase price, minus depreciation. Within hours of the EPA announcement, lawyers began filing suits as class actions on behalf of all U.S. vehicle owners alleging violations of state consumer laws. Following reports of additional questionable emissions software in about 85,000 VW, Audi and Porsche cars with 3.0-liter diesel engines in the U.S., additional suits were filed for consumers owning those vehicles.